Investment Rating - The report maintains a "Buy" rating for Tencent Music (TME.US/1698.HK) and raises the target price to $18 or HKD 70, indicating a potential upside of 19% from the current price of $15.09 [3][5]. Core Insights - Tencent Music's Q4 2024 revenue reached RMB 74.6 billion, a year-on-year increase of 8.2%, surpassing market expectations by 2.4%, primarily driven by better-than-expected social entertainment service revenue [1]. - The adjusted net profit for Q4 2024 was RMB 22.8 billion, exceeding market expectations of RMB 19.4 billion, attributed to improved gross profit and optimized operating expenses [1]. - The online music service revenue grew by 16.1% year-on-year in Q4 2024, supported by subscription and advertising revenue growth [2]. - The report forecasts continued growth in subscription revenue, with an expected ARPU increase to nearly RMB 12 by Q4 2025 [2]. - Social entertainment service revenue showed a sequential recovery, with a 6.0% increase quarter-on-quarter, although it still faced a year-on-year decline of 13.0% [2]. Financial Projections - The report projects the following financial metrics for Tencent Music: - FY24 revenue: RMB 28,401 million - FY25E revenue: RMB 30,817 million - FY26E revenue: RMB 34,176 million - FY27E revenue: RMB 37,711 million - Adjusted net profit for FY25E: RMB 8,627 million [4][10]. - The adjusted net profit margin is expected to improve, with FY25E and FY26E adjusted net profit margins projected at 28.0% and 28.5%, respectively [10].

Investment Rating - The report maintains a "Buy" rating for the company and raises the target price to HKD 9.1, indicating a potential upside of 19% from the current price of HKD 7.63 [1][3]. Core Insights - The company focuses on high-quality revenue growth, strategically emphasizing high-end camera module projects, which is expected to lead to significant profit improvements in the second half of 2024 [7]. - The fundamental growth trend is anticipated to continue into 2025, driven by a doubling of shipments for mobile periscope modules, rapid growth in ultrasonic fingerprint recognition modules, and ongoing expansion in automotive and drone sectors [7]. - The company has shown strong performance in controlling expenses, resulting in a net profit increase of 168% year-on-year for 2024 [7]. Financial Forecasts - Revenue is projected to grow from RMB 12,531 million in 2023 to RMB 20,974 million by 2027, with a compound annual growth rate (CAGR) of approximately 8% [2]. - Net profit is expected to rise significantly from RMB 82 million in 2023 to RMB 667 million in 2027, reflecting a robust growth trajectory [2]. - The gross margin is forecasted to improve from 4.1% in 2023 to 7.0% in 2027, indicating enhanced profitability [2]. Performance Metrics - For the second half of 2024, the company anticipates a revenue of RMB 84.8 billion, a 20% increase year-on-year, with a gross margin of 6.9% [7]. - The company expects to achieve a significant increase in the shipment of mobile modules, with 55% of shipments being 32 million pixels or higher by 2025 [7]. - The average selling price of camera modules is projected to increase, contributing to overall revenue growth [7]. Valuation - The report employs a sum-of-the-parts valuation method, assigning target price-to-earnings (P/E) ratios of 15.0x for mobile camera modules, 18.0x for other camera modules, and 20.0x for fingerprint recognition modules, leading to a target price of HKD 9.1 [7][15].

Economic Overview - China's economic data for January-February exceeded expectations, reflecting the effectiveness of previous policy stimuli, but the recovery remains unstable[1] - The inflation and credit data released earlier this month were weaker than expected, indicating potential challenges ahead[1] Consumption and Retail - The total retail sales of consumer goods grew by 4% year-on-year in January-February, up from 3.7% in December and surpassing the market expectation of 3.8%[2] - Restaurant consumption saw a significant increase, with a year-on-year growth rate of 4.3%, up 1.6 percentage points from December[2] - Sales of communication equipment surged to 26.2%, driven by the implementation of new subsidy policies for 3C digital products[2] Investment Trends - Fixed asset investment rebounded significantly, with a cumulative year-on-year growth rate of 4.1%, exceeding the market expectation of 3.2%[3] - Infrastructure investment growth accelerated, while real estate investment saw a reduced decline, although manufacturing investment continued to decline moderately[3] Real Estate Market - Real estate development investment fell by 9.8% year-on-year, a smaller decline than the previous year, but still below the market expectation of -8.5%[3] - New construction area saw a year-on-year decline of 29.6%, indicating ongoing challenges in the real estate sector[3] Employment and Unemployment - The urban surveyed unemployment rate rose to 5.4% in February, up 0.2 percentage points from January, which was worse than the expected 5.1%[7] External Economic Risks - The U.S. imposed a 10% tariff on all imports from China in February and March, which may gradually impact China's exports, with a projected 6% reduction in exports if tariffs increase to 60%[10] - The overall economic growth for the first quarter is expected to slightly decline to around 5% compared to the previous quarter[9] Policy Outlook - Continued policy support is anticipated, focusing on the execution of fiscal stimulus and real estate support policies, as well as the introduction of national birth subsidies[1] - The government aims to stabilize economic growth around 5%, emphasizing domestic demand and technological innovation as key drivers for the year[12]

Investment Rating - The report maintains a "Buy" rating for Xiaopeng Motors, anticipating strong sales performance in the short term and throughout the year [2]. Core Insights - Xiaopeng Motors has launched the 2025 models G6 and G9, which are expected to drive strong delivery growth this year. The company ranked first in export volume among new energy vehicle brands in China for 2024 [1][2]. - The G6 and G9 models are equipped with competitive pricing and advanced features, including standard Turing AI driving capabilities and high-performance 5C batteries, which can charge for 450 kilometers in just 10 minutes [2][4]. - Xiaopeng Motors plans to expand its market presence to 60 countries and regions by 2025, with significant sales achievements in Europe and the Middle East [1][2]. Summary by Sections Product Launch - The 2025 Xiaopeng G6 is designed as a versatile SUV with a competitive price range of RMB 176,800 to RMB 198,800, featuring a sleek design and advanced technology [4]. - The 2025 Xiaopeng G9 is positioned as a flagship AI SUV, priced between RMB 248,800 and RMB 278,800, offering luxury features and high comfort levels [4]. Market Performance - Xiaopeng Motors achieved over 5,000 pre-orders for the G6 within 7 minutes and over 3,000 for the G9 within 45 minutes of the launch [2]. - The company has regained its position as the top new energy vehicle brand in terms of delivery volume in early 2025 [1][2].

Investment Rating - The report maintains a "Buy" rating for the company, Li Auto (LI.US/2015.HK) [3][10] Core Views - The target price for Li Auto is raised to $32.2, indicating a potential upside of 17% [3][5] - The target price for Li Auto-W is set at HKD 132.0, also reflecting a potential upside of 17% [6][10] - The growth momentum for 2025 is expected to come from new model launches and expansion into overseas markets, alongside a strategic focus on AI investments [10][30] Financial Projections - Revenue is projected to grow from RMB 123,851 million in 2023 to RMB 259,382 million by 2027, with a compound annual growth rate (CAGR) of 31% in 2026 [4][11] - Gross margin is expected to stabilize around 20.9% by 2027, after a slight decline in the earlier years [4][11] - Net profit is forecasted to improve from a loss of RMB 11,704 million in 2023 to a profit of RMB 17,543 million by 2027 [4][11] Performance Review - In Q4 2024, the company reported revenue of RMB 44,274 million, a 6% year-over-year increase, with a net profit of RMB 3,523 million, down 38% from the previous year [12][10] - The gross margin for Q4 2024 was 20.3%, reflecting a decline compared to the previous year due to increased costs associated with new model launches [12][10] Market Expectations - The report highlights that the demand for new energy vehicles in China, particularly in the high-end segment, is expected to drive sales growth for Li Auto [30][35] - The company aims to enhance its AI capabilities and expand its retail network, with plans to open over 200 retail showrooms and 60 pop-up stores nationwide [10][30]

Investment Rating - The report maintains a "Buy" rating for Li Auto (LI.US/2015.HK) [3][10] - The target price for Li Auto (LI.US) is raised to $32.2, indicating a potential upside of 17% [3][5] - The target price for Li Auto-W (2015.HK) is raised to HKD 132.0, also indicating a potential upside of 17% [3][6] Core Insights - Li Auto's growth momentum for 2025 is supported by the launch of new models and expansion of its sales network, with a solid foundation for total delivery growth [10] - The company is focusing on international market expansion, which is expected to contribute to incremental growth in the next two years [10] - Li Auto's strategic emphasis on AI investments is aimed at ensuring long-term competitive advantages [10] Financial Performance and Forecast - Revenue projections for Li Auto from 2023 to 2027 are as follows: - 2023: RMB 123,851 million - 2024: RMB 144,460 million (growth of 17%) - 2025E: RMB 176,440 million (growth of 22%) - 2026E: RMB 230,493 million (growth of 31%) - 2027E: RMB 259,382 million (growth of 13%) [4][11] - Gross margin is projected to be 22.2% in 2023, declining slightly to 20.9% by 2027 [4][11] - Net profit (loss) projections are as follows: - 2023: RMB 11,704 million - 2024: RMB 8,032 million (decline of 31%) - 2025E: RMB 8,724 million (growth of 9%) - 2026E: RMB 12,922 million (growth of 48%) - 2027E: RMB 17,543 million (growth of 36%) [4][11] Market Expectations - In Q4 2024, Li Auto's revenue reached RMB 44,274 million, a year-on-year increase of 6% and a quarter-on-quarter increase of 3% [12] - The company achieved a gross margin of 20.3% in Q4 2024, with a net profit of RMB 3,523 million, down 38% year-on-year but up 25% quarter-on-quarter [12] - The average selling price of vehicles decreased by 12% year-on-year to RMB 268,709 [12] Valuation - The report employs a sum-of-the-parts valuation method, assigning a target price of $32.2 for Li Auto (LI.US) based on a target P/E ratio of 26.7x for 2025 [10][18] - The target price for Li Auto-W (2015.HK) is set at HKD 132.0 [10][18]

Investment Rating - The report maintains a "Hold" rating for the company and lowers the target price to HKD 6.6, indicating a potential downside of 14% from the current price of HKD 7.7 [2][3][7]. Core Insights - The company's revenue growth has shown a recovery with a year-on-year increase of 11% in the second half of 2024, reversing a declining trend since 2022. However, the adjusted net profit margin has narrowed, failing to continue the previous expansion trend [2][7]. - For 2025, the company is expected to achieve low double-digit revenue growth, but the potential for profit margin improvement appears limited due to significant expense reductions in 2024 and forward-looking investments in elder care and AI projects [2][7]. - The integration with Ping An Group is anticipated to enhance business synergies, but the extent of additional business growth from this consolidation remains uncertain [2][7]. Financial Projections - Revenue projections for the company are as follows: - 2023: RMB 4,674 million - 2024: RMB 4,808 million (up 2.9% YoY) - 2025E: RMB 5,480 million (up 14.0% YoY) - 2026E: RMB 6,253 million (up 14.1% YoY) - 2027E: RMB 7,211 million (up 15.3% YoY) [3][8]. - The adjusted net profit is projected to turn positive in 2024, reaching RMB 81 million, and is expected to grow to RMB 169 million in 2025 [3][8]. Market Position - The company's current market capitalization stands at HKD 16,686 million, with an average daily trading volume of HKD 51 million over the past three months [3][7]. - The stock has a 52-week price range of HKD 3.2 to HKD 9.6, indicating significant volatility [3][7]. Valuation Metrics - The report provides the following valuation metrics: - Price-to-Sales (P/S) ratio for 2025E is projected at 2.9, decreasing to 2.2 by 2027E [3][8]. - The expected earnings per share (EPS) for 2025 is projected to be RMB 0.1, with a diluted EPS of RMB 0.2 by 2027 [8].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 0.70, indicating a potential upside of 22.8% from the current price of HKD 0.57 [4][8]. Core Insights - The company is expected to see a marginal improvement in performance, with a high probability of earnings recovery in 2025. This is supported by a low valuation and an increased dividend yield, which provides significant upside potential compared to downside risks [8]. - The revenue trend is anticipated to reverse starting in the second quarter of 2024, with management expecting a return to healthier inventory levels in the industry by April. The company aims for its 2025 revenue to remain stable year-on-year [8]. - There is potential for a slight improvement in operating profit margins in 2025 due to expected retail discount improvements and increased sales of new products. However, the growth of e-commerce may continue to impact channel structure [8]. - The company is likely to maintain a high dividend payout ratio in 2025, with an expected dividend yield exceeding 10%, providing a safety net for the stock price [8]. Financial Forecasts - Revenue projections for the company are as follows: - 2023: RMB 20,064 million - 2024: RMB 18,454 million - 2025: RMB 18,592 million - 2026: RMB 19,272 million - 2027: RMB 19,782 million - The net profit attributable to shareholders is projected to increase from RMB 490 million in 2023 to RMB 684 million in 2027, reflecting a compound annual growth rate [3][10]. - The company’s price-to-earnings (P/E) ratio is expected to decrease from 5.6x in 2024 to 4.0x in 2027, indicating a more attractive valuation over time [3][10]. Market Performance - The company's stock has a 52-week price range of HKD 0.48 to HKD 0.69, with a current market capitalization of HKD 3,036 million [4][8]. - The average daily trading volume over the past three months is HKD 0.7 million, suggesting moderate liquidity in the stock [4].

Inflation Data - In February, the core CPI inflation rate fell by 0.22 percentage points to 0.23%, below the market expectation of 0.3%[1] - Overall CPI growth rate decreased by 0.25 percentage points to 0.22%, also lower than market expectations[1] - Year-on-year, the overall CPI dropped by 0.2 percentage points to 2.8%, while the core CPI decreased by 0.1 percentage points to 3.1%[1] Employment Trends - February non-farm payrolls increased by 151,000, slightly below the expected 160,000[2] - The unemployment rate rose by 0.1 percentage points to 4.1%, higher than the market expectation of 4%[2] - Average hourly wage growth slowed in February, although year-on-year growth still increased[2] Core CPI Components - Core goods prices saw a slight decrease in February, with a growth rate of 0.22% compared to 0.28% in January[2] - Super core services CPI dropped significantly by 0.5 percentage points to 0.21%[2] - Transportation services inflation rate fell to -0.81% in February from 1.84% in January, indicating a substantial decline[2] Tariff Impact - The ongoing tariff war, particularly the 10% tariff on Chinese goods, has not yet significantly impacted U.S. commodity prices[2] - The tariffs imposed on goods from Canada and Mexico could potentially raise U.S. inflation by 0.62 percentage points if fully passed on to consumers[3] - The uncertainty surrounding tariff policies continues to pose risks to inflation forecasts[5] Federal Reserve Outlook - Despite favorable employment and inflation data, the Federal Reserve is expected to maintain its current stance without immediate rate cuts due to tariff uncertainties[5] - The Fed is projected to pause rate cuts in March and May, with potential cuts resuming in June[5] - The upcoming March Fed meeting is anticipated to reaffirm a "wait-and-see" approach amid economic uncertainties[6]

Investment Rating - The report maintains a "Buy" rating for Hesai Technology (HSAI.US) and raises the target price to $20.0, indicating a potential upside of 25% based on a 2025 adjusted target P/E of 48.0x [1][5][10]. Core Insights - Hesai Technology achieved a revenue of RMB 720 million in Q4 2024, representing a 28% year-over-year increase, and became the first profitable manufacturer of automotive lidar [10][12]. - The company expects revenue to reach RMB 3.0-3.5 billion in 2025, with significant growth in both Non-GAAP and GAAP net profits [10][12]. - The domestic push for intelligent driving and successful overseas customer expansion are expected to drive continued growth in lidar shipments for passenger vehicles [10][12]. - The robotics application market is rapidly expanding, with expectations for nearly 200,000 lidar units shipped in 2025, contributing positively to the company's gross margin [10][12]. Financial Projections - Revenue projections for Hesai Technology from 2023 to 2027 are as follows: - 2023: RMB 1,877 million - 2024: RMB 2,077 million - 2025E: RMB 3,058 million - 2026E: RMB 4,231 million - 2027E: RMB 6,434 million - The expected revenue growth rates are 56% for 2023, 11% for 2024, 47% for 2025, 38% for 2026, and 52% for 2027 [2][11]. - The gross margin is projected to be 35.2% in 2023, increasing to 42.6% in 2024, and then stabilizing around 39.2% by 2027 [2][11]. Valuation - The report employs a DCF valuation method, assuming a revenue growth rate of 30% from 2030 to 2033 and a perpetual growth rate of 3.5%, resulting in a target price of $20.0 [10][14][15]. - The WACC is calculated at 16.8%, with a beta of 1.49 and an equity risk premium of 11.2% [14][15].